Forex: USD/JPY slips below 92.50

With China and Japan closed both today on bank holiday, USD/JPY is currently at 92.50, off recent session lows at 92.35, down -0.15% from previous weekly close Friday. As Sean Lee says, founder at FXWW, Yen strengthen on Friday's late Asian/early London session, on “comments from the Japanese FinMin. There were various interpretations of what he said,” the analyst adds, “but whatever the exact wording was, Yen shorts covered fairly aggressively as they are worried that the upcoming G20 might censure Japan for its aggressive stance,” he concludes.

“While Japanese officials definitely want to see further yen depreciation, the runaway rally that we’ve seen over the past few weeks may be causing both political and economic risks as the country now comes under strong criticism from its Asian neighbors while the market volatility creates hedging problems for its export driven corporate sector,” says Boris Schlossberg from BK Asset Management. Nikkei index closed Friday around the 11150 points mark, down -0.9% over the week, for the first time since mid Nov that has such a negative week.

Immediate support to the downside for USD/JPY lies at recent session lows 92.35, followed by Friday's lows at 92.17, and Feb 05 lows at 91.95. To the upside, closest resistance shows at recent session highs 92.76, followed by Friday's NY session/Feb 01 highs at 92.91/96, and Feb 04 highs at 93.20.

The issue to keep an eye on early this week, according to Marc Chandler. Head of Currency Strategy at BBH, "is whether recent price action represents a correction to the recent trend, a reversal or the start of a new trend."

Forex: EUR/JPY, is 127.70 the top bears have been waiting for?

After a 12-week winning streak, with the exception of marginal losses in early December, the Japanese Yen finally managed to step into positive territory against the Euro last week, first fading the last longs to join the party at a key weekly resistance at 127.00/50 before a sharp sell-off led the spot rate to break through 124.00.